China, India Snub World on Targets

China and India are among a group of developing nations that have rejected a plan by the G-8 to limit carbon emissions, a plan which environmentalists say doesn’t go far enough to combat global warming. From The Age:

In a setback for international climate negotiations, the emerging giants of the world economy yesterday refused to endorse a statement by the Group of Eight wealthy nations in which they proclaimed a “shared vision” to at least halve emissions by 2050.

The so-called “Group of Five” developing economies – China, India, Brazil, Mexico and South Africa – say rich nations must take the lead on emissions cuts, as they were historically responsible for climate change.

[…] In closed-door negotiations involving the G8 nations and leaders from eight other countries, only Australia, Indonesia and South Korea backed the G8 position on climate change.

Besides its size, China is, in fact, the main factor in many talks: There are the issues of the falling dollar and the surge of the exchange rate with the Euro. China can’t easily be ignored or forgotten, since it is the largest single creditor of the U.S., holding perhaps one trillion of its reserves in U.S. dollars.

Similarly, a central issue is the appreciation of the RMB. All the “big eight” are concerned about the inflow of cheap Chinese exports and would like to see a rapid revaluation of the RMB to stem those exports. However, given the looming global danger of inflation, expensive Chinese exports, which in turn would fuel domestic price hikes, could be dangerous as well. Even riskier, a stronger RMB could enable China to gobble up more oil and raw material imports, driving up international prices. Pundits already point at China’s new thirst for energy and commodities as one of the main forces raising prices worldwide.